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Identify Indian millionaires migrating to UK: Transparency International

panama papers Updated: Apr 07, 2016 18:51 IST
Prasun Sonwalkar
Panama Papers

TI warned “corrupt individuals” could use the Tier 1 Investors Visa system to secure residency, “thereby receiving an implicit endorsement of their money’s legitimacy from the UK state”. (Website)

Amid the revelations in the Panama Papers leaks, anti-graft campaigners have asked Britain to identify more than 3,000 foreign millionaires – including 62 Indians – who moved here under a “golden visa” scheme.

India is among the top five countries whose citizens have availed Tier 1 Investors Visas, which allow easier permanent residency, since 2008. The others are China, Russia, the US and Pakistan. Except nationality, no other details of such migrants are available.

In a report titled “Paradise Lost” this week, campaign group Transparency International (TI) made several recommendations to ensure Britain does not become “a prime destination for corrupt individuals looking to invest or launder the proceeds of their illicit wealth, enjoy a luxury lifestyle and cleanse their reputations”.

It warned “corrupt individuals” could use the Tier 1 Investors Visa system to secure residency, “thereby receiving an implicit endorsement of their money’s legitimacy from the UK state”.

The 62 Indian high net worth individuals were accompanied by 72 dependents, according to latest Home Office figures. Over £3 billion pounds reportedly entered the British economy through this visa category since it was introduced in 2008.

Migrants who invest £2 million can apply for permanent residency after five years. Investing £5 million cuts the waiting time to three years, and £10 million brings permanent residency after two years.

The TI claimed the visa category is vulnerable to abuse and said there is no dedicated system or “fit and proper” checks for applicants despite the clear risk of money laundering.

“The Home Office primarily relies on the effective operation of AML (anti-money laundering) checks being carried out by banks or asset management firms in the UK to identify whether there are grounds for suspicion of corruption,” it added.

“If the bank accepts the client’s account, the Home Office assume that this means that effective AML checks have been carried out and any risks have been identified.”

The report said until the rules were changed on April 6, 2015, there was no necessity for individuals to obtain a UK bank account before applying and being awarded the visa, which was “a huge loophole that allowed visas to be granted without any checks being carried out”.

Calling it the “blind faith” period, the report said most of the more than 3,000 visas granted under this category since 2009 were given during that period.

“In addition to the worrying lack of checks, there is no transparency around the system. All we know is the nationality of those entering under this system. We do not know who has benefited from this system, the amount invested or what was invested in,” the report said.

Seeking reforms, it added: “Retrospective checks should be undertaken on historical Tier 1 (Investor) visas that were granted in the ‘blind faith’ period and consideration given to publishing their details.”

Britain remains an attractive destination and a safe haven for global millionaires due to historical links and benefits of a stable, liquid economy, political stability and being largely free from government interference in private individual assets.

TI said: “Trillions of pounds flow through the UK financial system each year. Inevitably some of these transactions involve corrupt wealth, yet many are given a seal of approval by passing through the UK and its associated territories.

“Once the money is clean, the UK offers ample opportunity for corrupt individuals to enjoy it: high-end property, sports clubs, legitimate businesses, expensive cars, yachts, jewellery and art can all be purchased, allowing corrupt individuals to enjoy luxurious lifestyles.

“With the help of defamation lawyers and PR experts they can start their life afresh, and embed their children in society’s élite through exclusive education and mixing in the right social groups.”

Indian millionaires using Tier 1 Investors Visa

2008: 0

2009: 3

2010: 4

2011: 11

2012: 12

2013: 16

2014: 12

2015: 4

Total: 62

Total dependents: 72

(Source: Home Office)